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Buying in and Cashing out

“Buying In” is one of the most important concepts in Bitcoin. In short, your buy in refers to the time when you decide to purchase Bitcoins. The Bitcoin market is highly volatile, this means that prices can swing wildly in a short-period of time. Your goal as a trader is to buy when Bitcoins are cheap and sell when prices are high.

Bitcoin prices are highly susceptible to news announcements and other developments. For example, if Mt. Gox or another major exchange suffers a security breach, prices will likely plummet. If the security breach does not look to be “fatal”, however, and won’t cause the entire market to collapse, then this might be the perfect time to buy. At the same time, if a major company announces that it will start to develop Bitcoin computer applications, or a major store announces that it will accept the currency, prices could sky rocket. This would be a great time to sell.

No matter your investment strategy, you should consider these important concepts. You might be able to make a lot of money by paying close attention to swings in market prices. Even long-term investors should try to buy when prices are depressed, and avoid buying in when prices are high. And of course, all investors should aim to sell when prices are high.

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